KITCHING, Acting P. J.
Plaintiff James Doroshow appeals from a summary judgment in favor of Defendants Charles Delle Donne et al. Defendants are individual members of a private country club (the Club), who served on the Club's board of directors and/or rules committee. Plaintiff sued Defendants for defamation and damages allegedly caused by his expulsion from the Club.
The trial court granted Defendants' motion for summary judgment based largely on the finding that the process for expelling Plaintiff from the Club "does not have to be perfect; it has to be fair and the court finds that it was." Because the court's finding purports to resolve disputed issues of material fact, it cannot support summary judgment. We therefore reverse.
Plaintiff joined the Club in 2006, after paying $100,000 for a "full equity membership." In his membership application, Plaintiff agreed to abide by the Club's by-laws, rules and regulations.
The Club's by-laws authorize the rules committee to "investigate written complaints concerning the conduct of any member . . . and to take action thereon, and/or report to the Board of Directors its findings and recommendations as to disciplinary action." If a member disagrees with the committee's decision to impose a sanction, the member has the right to appeal the matter to the board of directors. In such cases, the Club's by-laws require the board to conduct "a full hearing de novo as to all relevant matters," after providing at least 10 days written notice to the member.
While the rules committee has authority to investigate complaints and impose certain penalties, the Club's by-laws vest the board of directors with the sole authority to expel members. Grounds for expulsion include, "A material violation of the By-Laws, House Rules or Policies of the Club" or "Any conduct which is detrimental to the welfare, interest, character or reputation of the Club."
Three alleged rule violations preceded Plaintiff's expulsion from the Club. In July 2011, Plaintiff was involved in an altercation with another member, Drew Grey. The incident began on the golf course and spilled over to the Club patio, where Grey continued to verbally assault Plaintiff and his guests while they dined. After repeatedly asking Grey to stop, Plaintiff momentarily held Grey against a wall with his hand on Grey's chest. Grey filed a complaint with the Club, which the rules committee investigated. After completing its investigation, the committee notified Plaintiff that it would hold a hearing concerning the alleged incident. The committee did not provide Plaintiff with a copy of Grey's written complaint. Plaintiff nevertheless attended the hearing and had an opportunity to present evidence. Both Plaintiff and Grey received 90-day suspensions for the incident.
Following the Grey incident, Defendants took a secret vote to expel Plaintiff from the Club. At the time, Defendants concluded they did not have "a sufficient `paper record'" to take the desired action. Plaintiff maintains Defendants thereafter conspired to "fabricate reasons" to justify his expulsion.
In December 2011, another member, Michael Prince, submitted a written complaint to the rules committee alleging that Plaintiff intentionally hit a golf ball in his direction, endangering his personal safety. Plaintiff and other members stated Prince hit an errant shot from the fourth fairway onto the fifth fairway where Plaintiff and his group were playing. Before Plaintiff saw Prince, who was several hundred yards away attempting to retrieve his ball, Plaintiff hit a shot from the fifth tee. Though Plaintiff had no intention of endangering Prince, Plaintiff's shot landed near him.
The committee investigated the incident, interviewed witnesses and reviewed Plaintiff's written statement concerning the matter. The committee then notified Plaintiff that it had scheduled a hearing to address Prince's complaint. Plaintiff did not receive a copy of Prince's written complaint in advance of the hearing.
Despite notifying Plaintiff that the hearing would be limited to the Prince incident, the rules committee also questioned Plaintiff concerning his alleged violations of the Club's rules regarding the use of cell phones. Plaintiff explained to the committee that, due to the recent untimely death of his wife, the Club's general manager had given him permission to use his cell phone in emergencies to speak with his children. Notwithstanding the accommodation, and Plaintiff's subsequent showing that the triggering phone call had been from his son concerning a car accident, the committee suspended Plaintiff for a total of 120 days for the Prince incident and cell phone violations.
On January 17, 2012, the rules committee submitted a memorandum to the board of directors detailing the foregoing rule violations and recommending Plaintiff's expulsion from the Club. Plaintiff received a copy of the memorandum and written notice that the board would consider his expulsion at a subsequent hearing. The notice advised Plaintiff that he was "invited to appear [at the hearing] to present any evidence or reasons as to why [he] should not be expelled."
In advance of the hearing, Plaintiff submitted a written statement and petition by several Club members opposing his expulsion. In communications preceding the hearing, Defendants called Plaintiff a "liar" and referred to him as a "poster boy" for cell phone violations, notwithstanding the accommodation the Club's general manager had granted to Plaintiff.
The board of directors held the scheduled hearing on January 26, 2012. The board accepted the rules committee's recommendation and approved Plaintiff's expulsion by a vote of 11-to-0, with one abstention. Following Plaintiff's expulsion, the Club sold his membership at a reduced price and remitted $10,000 to Plaintiff from the proceeds of the sale.
Plaintiff's suspensions and ultimate expulsion represented much harsher punishments than those imposed on other Club members for similarly dangerous conduct. For instance, in 2011, Club members David and Martin Hamburger deliberately struck a golf ball at another member's wife. Despite their deliberately dangerous conduct, David Hamburger received only the minimum 30-day suspension and Martin received no punishment. Plaintiff later learned the Hamburgers had made charitable financial contributions to an organization honoring Defendant Donne, and Donne had ensured they received favorable treatment from the other Defendants on the rules committee and board of directors so as not to "hurt his `friends.'"
On March 26, 2012, Plaintiff filed his initial complaint for conversion, defamation, and intentional infliction of emotional distress. In his operative first amended complaint, Plaintiff added five new causes of action for trespass to personal property, negligence, intentional interference with contractual relations, negligent interference with contractual relations, and negligent infliction of emotional distress. With the exception of the defamation claim, each cause of action alleged Defendants wrongfully expelled Plaintiff from the Club, resulting in damages that included the loss of Plaintiff's $100,000 membership fee. As for defamation, Plaintiff alleged Defendants maliciously called him a "liar" in an effort to harm his reputation with other members of the Club.
The trial court granted Defendants' motion for summary judgment. Relying principally on cases concerning the common law right to fair process (see fn. NOTEREF_Ref410984050\h 10, post), the court reasoned that its role in assessing whether Plaintiff was entitled to damages for his expulsion was limited to determining (1) whether "the procedure followed by the association is fair," and (2) whether the "expulsion rests upon a rule which is substantively capricious or contrary to public policy." After reviewing the evidence presented in connection with the motion, and acknowledging several disputed issues raised by Plaintiff concerning the procedural fairness of the expulsion process, the trial court granted summary judgment, concluding: "The process does not have to be perfect; it has to be fair and the court finds that it was."
Before we address the trial court's summary judgment ruling, we must briefly discuss an issue this court raised after Plaintiff filed his appeal from the judgment. Upon reviewing the appellate record, including the parties' separate statements of undisputed facts, we gave the parties notice that this court was considering affirming the summary judgment on a ground not relied upon by the trial court. In accordance with Code of Civil Procedure
In response to our notice, Plaintiff conceded the instant action was premature. Under the exhaustion of judicial remedies doctrine, Plaintiff acknowledged he could not bring an action for damages allegedly caused by his expulsion unless he first obtained a writ of mandate overturning the board of directors' decision.
Notwithstanding Plaintiff's concession, Defendants argued we should not affirm the summary judgment on this alternate basis. Defendants maintained they knowingly waived the doctrine for strategic reasons and that the trial court's stated rationale provided an adequate basis to affirm the summary judgment.
Because it impacts our review of the trial court's summary judgment ruling, we must briefly address the exhaustion of judicial remedies doctrine and the effect of Defendants' waiver. The rule is settled that when a private association reaches the decision to expel a member through a quasi-judicial process, the member may not bring an action for damages caused by the alleged wrongful expulsion, unless the member first succeeds in overturning the association's decision in a mandamus proceeding. (Westlake, supra, 17 Cal.3d at p. 484.) This rule, sometimes referred to as the exhaustion of judicial remedies doctrine, accords a proper respect to an association's quasi-judicial procedure, while mandating a uniform practice of judicial, rather than jury, review of quasi-judicial decisions. (Ibid.) The consequence of the rule is to recognize that so long as the association's quasi-judicial decision is not set aside through appropriate review procedures, the decision has the effect of establishing the propriety of the association's action, and no claim for damages can be maintained. (Ibid.)
In Westlake, the plaintiff, Dr. Kaiman, sued Westlake Community Hospital and numerous individual members of the hospital's board and committees after the hospital revoked her staff privileges. (Westlake, supra, 17 Cal.3d at p. 469.) Her complaint alleged the revocation stemmed from a malicious conspiracy engineered by the named defendants to destroy her medical practice, restrain competition, and intentionally inflict emotional distress upon her. (Id. at p. 470.) Kaiman further alleged that "the revocation of her privileges at Westlake `was pursued and perfected in a manner contrary to established principles of fairness and justice,' and contrary to Westlake's own bylaws and constitution." (Ibid.)
The Westlake defendants moved for summary judgment. The supporting affidavits showed the hospital's credentials committee recommended the revocation of Kaiman's staff privileges, after which the hospital notified Kaiman of the decision and of her right to request a hearing before a judicial review committee. (Westlake, supra, 17 Cal.3d at pp. 471-472.) Kaiman requested a hearing, at which she called witnesses and introduced documentary evidence. After the hearing, the hospital informed Kaiman that the judicial review committee had determined her staff privileges should be revoked and advised Kaiman of her right to appeal the decision to the hospital's board of directors. Kaiman appeared before the board and presented her objections, after which the board affirmed the judicial review committee's decision. (Ibid.)
The Westlake defendants asserted the foregoing facts conclusively established the invalidity of Kaiman's suit. Among other things, the defendants argued Kaiman "could not `collaterally attack' the hospital's revocation decision by a tort action, but could only seek damages after she had succeeded in a `direct attack' on the quasi-judicial hospital decision in a mandamus proceeding." (Westlake, supra, 17 Cal.3d at p. 473.) The trial court denied the defendants' summary judgment motion. (Ibid.) The Supreme Court reversed.
The Supreme Court concluded Kaiman's tort action against the hospital and individual board and committee members was "premature" because Kaiman "did not challenge the revocation through a mandamus proceeding." (Westlake, supra, 17 Cal.3d at p. 485.) The high court analogized this condition to a comparable requirement in malicious prosecution actions, which can only be maintained after the allegedly maliciously initiated proceeding has terminated favorably for the plaintiff. (Id. at p. 483.) Though acknowledging the distinctions "between public and private administrative proceedings," the court concluded that the "general policy underlying the `favorable termination' requirement in malicious prosecution actions applies in the present context." (Id. at pp. 483-484.) The court explained: "As in a malicious prosecution action, plaintiff's position rests on a contention that defendants intentionally and maliciously misused a quasi-judicial procedure in order to injure her; such a claim is necessarily premised on an assertion that the hospital's decision to revoke plaintiff's privileges was itself erroneous and unjustified. Although a quasi-judicial decision reached by a tribunal of a private association may not be entitled to exactly the same measure of respect as a similar decision of a duly constituted public agency [citation], we believe that so long as such a quasi-judicial decision is not set aside through appropriate review procedures the decision has the effect of establishing the propriety of the hospital's action. [Citation.] Accordingly, we conclude that plaintiff must first succeed in overturning the quasi-judicial action before pursuing her tort claim against defendants."
The Westlake court also identified important policy considerations that are advanced by requiring mandamus review before permitting an action for damages: "In our view, the above requirement accords a proper respect to an association's quasi-judicial procedure, precluding an aggrieved party from circumventing the established avenue of mandamus review. In addition, this result will simplify court procedures by providing a uniform practice of judicial, rather than jury, review of quasi-judicial administrative decisions." (Westlake, supra, 17 Cal.3d at p. 484, citing § 1094.5.) Finally, the court observed, "this procedure affords a justified measure of protection to the individuals who take on, often without remuneration, the difficult, time-consuming and socially important task of policing medical personnel," yet remain potentially subject to liability should the court determine "in a mandamus proceeding that an association's quasi-judicial decision cannot stand, either because of a substantive or procedural defect."
As Plaintiff implicitly acknowledged in his response to this court's notice, the material undisputed facts in the instant case are on all fours with the facts and reasoning of Westlake. In his separate statement of undisputed facts and declaration in opposition to Defendants' summary judgment motion, Plaintiff admitted or did not materially dispute the following: (1) the rules committee notified Plaintiff that other members had filed written complaints concerning his alleged rule violations; (2) the committee interviewed witnesses and investigated the alleged violations; (3) the committee held hearings concerning the alleged violations, at which Plaintiff was allowed to present evidence and explain his conduct; (4) following the investigations and hearings, the committee submitted a memorandum to the Club's board of directors detailing the committee's findings and recommending Plaintiff's expulsion; (5) Plaintiff received a copy of the committee's memorandum and was notified of his opportunity to present evidence and argument at a hearing before the board; (6) Plaintiff submitted a written statement and petition by several Club members opposing his expulsion; and, (7) at the noticed hearing, the board voted in favor of expelling Plaintiff from the Club.
Be that as it may, as Defendants argued in their supplemental brief, the exhaustion of judicial remedies doctrine is not jurisdictional and may be waived by parties who are otherwise entitled to its protection. (Johnson, supra, 24 Cal.4th at p. 70 [while exhaustion of administrative remedies is "`a jurisdictional prerequisite to resort to the courts[,]' ""[e]xhaustion of judicial remedies, on the other hand, is necessary to avoid giving binding `effect to the administrative agency's decision'"]; Knickerbocker, supra, 199 Cal.App.3d at p. 241 [overturning an administrative decision in mandamus action is not a "jurisdictional prerequisite to filing a tort action for damages in all cases"].) In Defendants' supplemental brief and at oral argument, defense counsel emphatically maintained that Defendants had knowingly waived the exhaustion of judicial remedies requirement for strategic reasons. In view of this representation, we will not interpose a defense that Defendants and their counsel have knowingly decided to waive.
We must nevertheless determine what effect Defendants' waiver has on the instant proceedings. As discussed, the exhaustion of judicial remedies doctrine provides that "unless a party to a quasi-judicial proceeding challenges the agency's adverse findings made in that proceeding, by means of a mandate action in superior court, those findings are binding in later civil actions." (Johnson, supra, 24 Cal.4th at pp. 69-70, citing Westlake, supra, 17 Cal.3d 465.) By requiring a successful challenge to the decision under the standards for obtaining mandamus relief set forth in section 1094.5, the requirement "accord[s] a proper respect to an association's quasi-judicial procedure, precluding an aggrieved party from circumventing the established avenue of mandamus review."
"On appeal after a motion for summary judgment has been granted, we review the record de novo, considering all the evidence set forth in the moving and opposition papers except that to which objections have been made and sustained." (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) We "`consider all of the evidence' and `all' of the `inferences' reasonably drawn therefrom [citation], and must view such evidence [citations] and such inferences [citations], in the light most favorable to the opposing party." (Aguilar, supra, 25 Cal.4th at p. 843.) We make "an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law." (Iverson v. Muroc Unified School Dist. (1995) 32 Cal.App.4th 218, 222.)
A defendant is entitled to summary judgment upon a showing that the plaintiff's action has no merit. (§ 437c, subd. (a).) The defendant meets this burden with respect to each cause of action by establishing undisputed facts that negate one or more elements of the claim or state a complete defense to the cause of action. (Id., subd. (p)(2); Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487.) Once the defendant has made such a showing, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to the cause of action or defense. (Aguilar, supra, 25 Cal.4th at pp. 849, 853.) "[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law." (Id. at p. 850.)
In moving for summary judgment, Defendants introduced evidence concerning Plaintiff's alleged rule infractions and the quasi-judicial process that culminated in his expulsion. Based on this evidence, Defendants argued the decision to expel Plaintiff was not arbitrary, the process employed was indisputably fair, and Plaintiff could not establish tortious conduct under any theory asserted in the complaint.
Plaintiff opposed the motion with competing evidence challenging the fairness of the process. Among other things, Plaintiff's declaration asserted that he had no opportunity to review the written complaints lodged by Grey or Prince in advance of the disciplinary hearings, nor had he received notice that his alleged cell phone use would be raised at the hearing or incorporated into the rules committee's expulsion recommendation. Plaintiff also disputed the procedural fairness of the hearing that preceded the board of directors' vote to expel him. In that regard, he presented evidence suggesting, among other things, that the board did not review his written response to the rules committee's recommendation before voting for his expulsion.
Plaintiff also introduced evidence to dispute the factual basis for the expulsion. That evidence consisted mainly of his declaration, wherein Plaintiff recounted his version of the events underlying the purported rule infractions. Plaintiff argued the evidence, when viewed in the light most favorable to him as the non-moving party, did not support the committee's findings concerning his alleged rule infractions, nor the board's decision to expel him from the Club based on those supposed infractions.
The trial court granted summary judgment, ruling Plaintiff's claims were deficient because "Defendants' actions were not wrongful."
First, with regard to the committee's findings and the board's decision, the trial court stated, "The court is not required to evaluate the merits of a member's expulsion." This is true when a private association's decision collaterally estops the member from relitigating issues adversely decided against him in the underlying quasi-judicial disciplinary proceeding under the exhaustion of judicial remedies doctrine. (Westlake, supra, 17 Cal.3d at p. 484; Johnson, supra, 24 Cal.4th at pp. 69-70; Knickerbocker, supra, 199 Cal.App.3d at p. 244.) Where the doctrine's protections are invoked, the court's role in assessing a challenge to the sufficiency of the evidence is limited to determining whether there is any substantial evidence, disputed or undisputed, supporting the adjudicatory body's decision. (§ 1094.5, subd. (c).) But here, Defendants knowingly waived the doctrine's protections. Thus, the board's decision does not collaterally estop Plaintiff from opposing summary judgment on the ground that the committee's findings were erroneous or pretextual in view of the conflicting evidence he introduced concerning his alleged rule infractions.
Second, with regard to the conflicting evidence concerning the procedural fairness of the disciplinary process, the trial court concluded, "The process does not have to be perfect; it has to be fair and the court finds that it was." This finding may well have been correct had the trial court been assessing the validity of the board's decision under the standard set forth in section 1094.5. However, insofar as Plaintiff's tort claims are premised on the theory that Defendants used the disciplinary proceedings as a pretext to wrongfully convert his membership interest and inflict emotional distress, his evidence, when assessed in accordance with the standards governing summary judgment, raises triable issues of fact. As Defendants waived the deferential treatment that would otherwise be accorded to the board's decision (see Westlake, supra, 17 Cal.3d at p. 484), the trial court's factual finding concerning the fairness of the disciplinary process was error.
The trial court's error stems in part from its reliance on the following statement from Budwin v. American Psychological Assn. (1994) 24 Cal.App.4th 875, 879: "When a voluntary association disciplines one of its members, `. . . the only function which the courts may perform is to determine whether the association has acted within its powers in good faith, in accordance with its laws and the law of the land.'" This statement is inapposite because it reflects the fact that Budwin, unlike the instant case, was a writ of mandate proceeding, as was the Supreme Court case Budwin relied upon—Smith v. Kern County Medical Assn. (1942) 19 Cal.2d 263. (See Budwin, at p. 879 [decision by private, voluntary association of psychologists to censure member properly subject to judicial review by petition for writ of mandate]; Smith, at p. 268 [petition for writ of mandate challenging expulsion from medical society properly dismissed where "[t]he procedure provided by the rules of the society was followed and the petitioner was accorded every opportunity to defend himself"]; see also Smetherham v. Laundry Workers' Union (1941) 44 Cal.App.2d 131, 135 ["Mandamus is a proper proceeding by means of which to compel the reinstatement to membership of one who has been illegally expelled from a duly organized association"].) The rule stated in Budwin is consistent with the deferential treatment accorded to a private association's disciplinary decision in a mandamus action. And, as we have explained, this deferential treatment was a key policy basis for the exhaustion of judicial remedies doctrine announced in Westlake. However, in view of Defendants' waiver, the Budwin court's statement concerning the court's limited function in a mandamus proceeding has no application to Plaintiff's tort claims in the instant case.
The other cases cited in the trial court's statement of decision address the contours of the common law right to fair procedure and when that right can be invoked to set aside an expulsion or other disciplinary action by a private association. (See Potvin v. Metro. Life Ins. Co. (2000) 22 Cal.4th 1060 (Potvin); Pinsker v. Pac. Coast Soc. of Orthodontists (1974) 12 Cal.3d 541 (Pinsker); Kim v. Southern Sierra Council Boy Scouts of America (2004) 117 Cal.App.4th 743 (Kim); Youngblood v. Wilcox (1989) 207 Cal.App.3d 1368 (Youngblood).)
The summary judgment is reversed. Plaintiff is entitled to costs.
ALDRICH, J. and LAVIN, J.
As for the defamation claim, the trial court concluded there was no evidence of a published written statement constituting libel and any allegedly slanderous statements were "privileged under Civil Code section 47[, subdivision] (c) as they were made during the course of the investigation and decision making process." A communication to a "person interested therein" is privileged under section 47 only if it is made "without malice." (Civ. Code, § 47, subd. (c); Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 723, fn. 7 ["if malice is shown, the privilege is not merely overcome; it never arises in the first instance"].) As Plaintiff argues, the evidence of Defendants' allegedly unfair conduct in the disciplinary proceedings, coupled with their statements that Plaintiff was a "liar" and had violated the Club rules concerning cell phone use, could support a finding of malice in this case. (See White v. State of California (1971) 17 Cal.App.3d 621, 629 ["`"[Malice is] a desire or disposition to injure another founded upon spite or ill will. . . ." . . . Malice may also be implied if the defamatory remarks, although honestly believed to be true, are `exaggerated, overdrawn, or colored to the detriment of plaintiff, or are not stated fully and fairly with respect to the plaintiff, . . .'"].) Accordingly, disputed issues exist as to whether Defendant's allegedly defamatory statements were privileged under Civil Code section 47, subdivision (c).
